Senate prepares for showdown
By Craig Gilbert
Milwaukee Journal Sentinel
July 26, 2001

"It is absolutely perfect in its wretchedness," conservative activist Grover Norquist told senators Wednesday.

Of course, the same program that is un-American to Midwesterners and free-market proponents is apple pie to advocates in the East.

"It helps famers, it helps consumers and it costs federal taxpayers nothing," Vermont Democrat Patrick Leahy declared at a Senate hearing on the issue.

Another showdown looms over the Northeast Interstate Dairy Compact, which sets a minimum price for fluid milk in six New England states. It was created in 1997 and is to expire at the end of September. A fight on the issue could occur in the Senate at any time.

"How can this really be defended?" countered Feingold, who called the program "nothing short of government-sponsored price fixing."

Burying the compact is the deep desire of Wisconsin's two senators, Democrats Herb Kohl and Russ Feingold. Midwestern farmers say the compact hurts them by erecting trade barriers against producers outside the Northeast and by encouraging overproduction within the compact's borders, depressing prices elsewhere.

They also say the compact is offensive to such notions as open trade, competition and a national marketplace.

"There is nothing American about the dairy cartel in place in the Northeast," said Kohl.

Supporters, though, not only want to extend the compact but also expand the concept to include other states in the East and South and Northwest. They could try as early as this week to attach their plan to a broader farm bill.

"There is such a large fluctuation in prices that the small dairy farmer is at the mercy of irrational forces," said Pennsylvania Republican Arlen Specter, who introduced the bill to establish new compacts.

"How can this really be defended?" countered Feingold, who called the program "nothing short of government-sponsored price fixing."

The arguments

Opponents say the price supports hurt lower-income consumers, forcing them to pay more for milk than they would without the compact. Supporters dispute that, though the compact's executive director, Daniel Smith, conceded in his testimony Wednesday that the "record is uncertain."

Backers also contend that the compact is a lifeline for a dwindling number of New England dairy farms. A Boston conservationist who defended the compact Wednesday said it helps combat sprawl by keeping farmers from selling their land to developers.

New York Democrat Charles Schumer, who wants the compact extended to his state, said Wednesday that without it, "we will have no dairy industry in New York." Critics say the compact hasn't kept farmers in business.

Kohl asked Smith on Wednesday what made milk so different that it alone merited a regional pricing arrangement.

"Milk is a unique product," said Smith. "It is both bulky and perishable."

Kohl called that argument "specious" and "almost breathtaking."

"Saying there's only one commodity in the world that argues for a (regional) price-fixing scheme--I'm blown away by that argument," said Kohl.

Wisconsin farmer

Wisconsin dairy farmer Richard Gorder of Mineral Point also testified, telling the panel in prepared remarks that by setting an artificial price for milk, the compact leads to overproduction of cheese and butter, driving down prices for producers outside the Northeast.

At one point Wednesday, Leahy bristled at complaints the compact is harmful to Midwesterners, saying "we spend an enormous amount of tax dollars helping farmers in the Midwest."

The compact's political fate is unclear. The program might have more die-hard supporters than ardent opponents. Leahy, a leading supporter, chairs the Judiciary panel, which has jurisdiction over compacts and held Wednesday's hearing. But Kohl and Feingold both sit on the committee, and Kohl has extra clout as chairman of the appropriations subcommittee on agriculture.

The compact is unlikely to survive without the support of congressional leaders. Opponents believe Senate leaders are on their side, and are also hopeful regarding the White House.

The political dynamics on dairy compacts were scrambled recently when Vermont Sen. James Jeffords left the GOP, shifting control of the Senate to Democrats. Preserving the New England compact is a pet cause of Jeffords. And although Democratic leaders in the Senate might feel a debt toward the Vermonter, the White House doesn't.

"I think we have a really good chance of defeating it," Feingold said during a break in the hearing.